The study aims to assess the monetary costs borne by independent smallholders associated with Malaysian Sustainable Palm Oil (MSPO) certification and the benefits of MSPO certification for these smallholders, specifically with regard to yield improvement and good agricultural practices. Ensuring a supply of sustainably produced palm oil is essential as palm oil contributes significantly to the social and economic development of Malaysia. The contribution by independent smallholders is very significant because they account for 0.99 million hectares (16.7%) of the total oil palm planted area in the country. Based on the findings of this study, it was observed that MSPO certification resulted in an increase in fresh fruit bunch (FFB) yield from 17.88 t/ha/yr before certification to 21.24 t/ha/yr after MSPO certification. Also, MSPO certification led to an improved adoption of good agricultural practices and increased fertiliser use from 4.18 kg/ha/yr before certification to 6.53 kg/ha/yr after certification. Even though the increase in fertiliser use increased costs for the independent smallholders after MSPO certification, the FFB yield was also improved, resulting in a net additional income of RM489/ha. Nevertheless, these findings were based on a limited number of samples, taking into consideration that the number of independent smallholders who were MSPO-certified at the time of the study (2017/18) was very small, i.e., less than 1% of the total number of independent smallholders in Malaysia.
Keywords: MSPO certification, independent smallholders, FFB yield, good agricultural practices, cost of sustainable palm oil production